Councils face 1.8% cut in funding

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Published: Thursday 18th December 2014 by The News Editor

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Councils in England are to face an overall cut of 1.8% in their total spending power in 2015/16.

Announcing the settlement in the House of Commons, local government minister Kris Hopkins said that the reduction would leave councils with “considerable total spending power”.

The 1.8% cut – first pencilled in last year – was lower than in 2014/15 and one of the lowest since the coalition came to power in 2010, said Mr Hopkins. No council will face a loss in spending power of more than 6.4%.

Mr Hopkins described the settlement as “fair for all parts of the country, whether North or South, urban or rural”.

The bulk of local authorities’ spending power comes from grants from central government, with around a quarter raised from council tax.

Graeme McDonald, director of the Society of Local Authority Chief Executives and Senior Managers (SOLACE), said: ” This settlement reminds us that the financial challenge facing local government is immense. Cuts of up to 6.4% will push some authorities to breaking point.

“Government is beginning to recognise that councils have led the way on deficit reduction, but with cuts and demand increasing, fragility is beginning to show. The financial future of local services is unsustainable without a more ambitious plan for public service reform.”

Published: Thursday 18th December 2014 by The News Editor

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